Liberty Mut. Ins. Co. v. Three-C Body Shop, Inc. , 2020 Ohio 2694 ( 2020 )

[Cite as Liberty Mut. Ins. Co. v. Three-C Body Shop, Inc., 2020-Ohio-2694.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Liberty Mutual Insurance Company, :
Plaintiff-Appellee, : No. 19AP-775
(C.P.C. No. 18CV-7026)
v. :
(ACCELERATED CALENDAR)
Three-C Body Shop, Inc., :
Defendant-Appellant. :
D E C I S I O N
Rendered on April 28, 2020
On brief: Kesha D. Kinsey, for appellee.
On brief: Charley Hess, for appellant.
APPEAL from the Franklin County Court of Common Pleas
BROWN, J.
{¶ 1} Three-C Body Shop, Inc. ("Three-C"), defendant-appellant, appeals the
judgment of the Franklin County Court of Common Pleas in which the court granted the
motion to dismiss, pursuant to Civ.R. 12(B)(6), filed by Liberty Mutual Insurance Company
("Liberty"), plaintiff-appellee.
{¶ 2} Three-C is a company engaged in the business of automobile collision repair.
Liberty provides automobile insurance. Liberty's insured driver caused damage to a vehicle
owned by Dan Lobdell. Lobdell took his vehicle to Three-C for repair. On January 4, 2017,
Liberty issued a check to Three-C in the amount of $12,506.81 to pay the cost of repairs to
Lobdell's vehicle. After making payment, Liberty determined that Lobdell's vehicle
sustained more damage than originally believed, deemed the vehicle a total loss, paid
Lobdell for the total loss, and requested Three-C return the $12,506.81. Three-C refused to
No. 19AP-775 2
return the money, claiming the money should be used as an offset for Liberty's past
underpayments of repairs (known as "short pays" in the automobile collision repair
industry) performed by Three-C and for which Liberty was the responsible insurer.
{¶ 3} On May 21, 2018, Liberty filed an action against Three-C in the Franklin
County Municipal Court seeking to recover the $12,506.81 payment it made to Three-C. On
June 19, 2018, Three-C filed an answer, as well as a counterclaim, relating to the Lobdell
vehicle. On July 6, 2018, Three-C filed an amended answer and counterclaim which alleged
permissive counterclaims for breach of implied contract, unjust enrichment/quantum
meruit, and account related to Three-C's repairs to 56 other vehicles for which Liberty failed
to fully pay. The counterclaim contained a demand for $57,555.71 in damages, an amount
in excess of the jurisdiction of the municipal court. On July 16, 2018, the case was
transferred to the Franklin County Court of Common Pleas.
{¶ 4} On April 2, 2019, Liberty filed a motion for judgment on the pleadings and
motion for more definite statement.
{¶ 5} On April 18, 2019, Three-C filed a second amended answer and second
amended counterclaim which alleged claims for breach of quasi-contract and implied
contract, unjust enrichment/quantum meruit, and account.
{¶ 6} On April 22, 2019, Liberty filed a Civ.R. 12(C) motion for judgment on the
pleadings with regard to Three-C's second amended counterclaim. On May 22, 2019, Three-
C filed a memorandum contra in which it withdrew its claim for breach of contract implied-
in-fact and its claim on an account, leaving three claims in the second amended
counterclaim: quasi-contract (breach of contract implied-in-law), unjust enrichment, and
quantum meruit.
{¶ 7} On October 3, 2019, the trial court issued a decision finding Liberty's April 2,
2019 motions moot as a result of Three-C's filing of the second amended answer and second
amended counterclaim. The trial court also found Liberty's Civ.R. 12(C) motion was
prematurely filed because the pleadings were not yet closed, as Liberty had not yet
responded to Three-C's second amended counterclaim. The trial court construed Liberty's
Civ.R. 12(C) motion as a 12(B)(6) motion to dismiss for failure to state a claim. The trial
court then granted Liberty's motion to dismiss for failure to state a claim.
No. 19AP-775 3
{¶ 8} On November 11, 2019, the parties filed a stipulated consent judgment,
stipulating that Three-C pay $12,506.81 to Liberty. Three-C appeals the trial court's
judgment granting Liberty's motion to dismiss for failure to state a claim, asserting the
following assignment of error:
The trial court erred when it granted appellee's motion to
dismiss pursuant to Rule 12(B)(6) and dismissed appellant's
Second Amended Counterclaim.
{¶ 9} Three-C argues in its sole assignment of error the trial court erred when it
granted Liberty's motion to dismiss pursuant to Civ.R. 12(B)(6). When reviewing a decision
on a Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be
granted, this court's standard of review is de novo. Foreman v. Ohio Dept. of Rehab. &
Corr., 10th Dist. No. 14AP-15, 2014-Ohio-2793, ¶ 9. A Civ.R. 12(B)(6) motion to dismiss
tests the sufficiency of the complaint. O'Brien v. Univ. Community Tenants Union, Inc., 42
Ohio St. 2d 242, 245 (1975). In ruling on a motion to dismiss pursuant to Civ.R. 12(B)(6),
the court must construe the complaint in the light most favorable to the plaintiff, presume
all factual allegations in the complaint are true, and make all reasonable inferences in favor
of the plaintiff. Mitchell v. Lawson Milk Co., 40 Ohio St. 3d 190, 192 (1988). Unsupported
conclusions of a complaint, however, are insufficient to withstand a motion to dismiss. Id.
at 193. The dismissal of a complaint for failure to state a claim is proper when it appears,
beyond doubt, the plaintiff can prove no set of facts entitling him to relief. O'Brien at 245.
Finally, although the trial court may not rely on evidence outside the complaint, it may take
into consideration both the complaint and any attachments to it. Smith v. Estate of Knight,
10th Dist. No. 18AP-534, 2019-Ohio-560, ¶ 7; Beard v. New York Life Ins. & Annuity Corp.,
10th Dist. No. 12AP-977, 2013-Ohio-3700, ¶ 11.
{¶ 10} In the present case, in its second amended complaint, Three-C alleged claims
for quasi-contract, breach of contract implied-in-law, unjust enrichment, and quantum
meruit. "A claim for unjust enrichment arises not from a true contract, but from a contract
implied in law, or quasi contract." Grothaus v. Warner, 10th Dist. No. 08AP-115, 2008-
Ohio-6683, ¶ 8. The elements of an unjust enrichment claim are: (1) a benefit conferred by
a plaintiff upon a defendant, (2) knowledge by the defendant of the benefit, and
(3) retention of the benefit by the defendant under circumstances where it would be unjust
to do so without payment. Saraf v. Maronda Homes, Inc., 10th Dist. No. 02AP-461, 2002-
No. 19AP-775 4
Ohio-6741, ¶ 10, citing Hambleton v. R.G. Barry Corp., 12 Ohio St. 3d 179, 183 (1984). In
an unjust enrichment claim " '[i]t is not sufficient for the plaintiffs to show that [they have]
conferred a benefit upon the defendants. [Plaintiffs] must go further and show that under
the circumstances [they have] a superior equity so that as against [them] it would be
unconscionable for the defendants to retain the benefit.' " United States Health Practices
v. Blake, 10th Dist. No. 00AP-1002 (Mar. 22, 2001), quoting Katz v. Banning, 84 Ohio
App.3d 543, 552 (10th Dist.1992). "A claim for quantum meruit shares the same essential
elements as a claim for unjust enrichment, and both doctrines are equitable doctrines."
Pohmer v. JPMorgan Chase Bank, N.A., 10th Dist. No. 14AP-429, 2015-Ohio-1229, ¶ 20,
citing Garb-Ko, Inc. v. Benderson, 10th Dist. No. 12AP-430, 2013-Ohio-1249, ¶ 26.
{¶ 11} Here, Three-C alleges the insurance policies issued by Liberty provide that it
is Liberty's duty to pay for vehicle collision repairs that are "reasonable" and "necessary" to
restore that vehicle to its pre-damage condition, but Liberty unilaterally determines which
repairs are reasonable and necessary and the amount it will pay for those repairs. Three-C
complains that it must accept Liberty's determinations as to which repairs and costs are
reasonable and necessary without any legal recourse. Based upon these contentions, Three-
C argues it should be permitted to maintain an action based upon unjust enrichment
because Three-C's restoration of the vehicles to their pre-accident condition conferred a
direct benefit upon Liberty; that is, Three-C completely satisfied the contractual legal duty
of Liberty to its insured. However, in completely satisfying Liberty's contractual legal duty
to its insured, Three-C performed the repair services for less than the actual cost of the
services that were necessary in order for Liberty to satisfy its legal, contractual duty to its
insureds. Three-C asserts that, although Liberty may disagree regarding the necessity and
reasonableness of all of the repair services and costs, an impartial arbiter should make such
a determination.
{¶ 12} Three-C concedes this court has already addressed and rejected the same
arguments it now raises in Three-C Body Shops, Inc. v. Nationwide Mut. Fire Ins. Co., 10th
Dist. No. 16AP-742, 2017-Ohio-1461, and its companion case Three-C Body Shops, Inc. v.
Nationwide Mut. Fire Ins. Co., 10th Dist. No. 16AP-748, 2017-Ohio-1462 (collectively
referred to as "the Nationwide cases"). In the Nationwide cases, Three-C's customers
sought to have their vehicles repaired after they were damaged in an accident. The vehicles
No. 19AP-775 5
were insured by Nationwide Mutual Fire Insurance Company ("Nationwide") under
policies that, as in the present case, required Nationwide to pay for any reasonable and
necessary repairs to bring the vehicles to their pre-accident condition. Three-C and the
customers entered into contracts, which Three-C forwarded to Nationwide, and Three-C
repaired the vehicles. However, Nationwide only paid for a portion of the repair costs. In
the two actions Three-C filed against Nationwide, Three-C asserted claims for breach of
contract and unjust enrichment/quantum meruit. Pursuant to the unjust
enrichment/quantum meruit claims, Three-C alleged that Nationwide knew the customers
had brought the vehicles to Three-C for repair and authorized it to repair the vehicles to
their pre-accident condition. Three-C claimed these repairs conferred a benefit upon
Nationwide because it fulfilled Nationwide's obligation to its insureds to restore and insure
the vehicles, the insurer retained this benefit, and that this was unjust without full payment
to Three-C. The trial court granted Nationwide's motion for judgment on the pleadings
under Civ.R. 12(C). As pertinent to the present case, with regard to the unjust
enrichment/quantum meruit claims, the trial court found that the repairs were for the sole
benefit of the customers, not Nationwide. On appeal, this court found that Three-C had not
conferred a benefit on Nationwide by performing repair work that restored the customers'
vehicles to their pre-accident condition. We reasoned that Three-C performed no work for
Nationwide and the vehicle repairs conferred a benefit only on its customers. We
acknowledged that the repair work may have had the collateral effect of restoring the
customers' vehicles to their pre-accident condition, but the connection between Three-C
and Nationwide was too indirect to constitute a "benefit conferred" for purposes of a
common law claim of unjust enrichment. We concluded that, because Three-C's claim
failed to describe a benefit it conferred on Nationwide to support its unjust
enrichment/quantum meruit claims, the trial court did not err when granting judgment in
Nationwide's favor on the claims.
{¶ 13} Under the legal doctrine of stare decisis, courts follow controlling precedent,
thereby creating stability and predictability in our legal system. State ex rel. Davis v. Pub.
Emps. Retirement Bd., 120 Ohio St. 3d 386, 2008-Ohio-6254, ¶ 38. Courts adhere to stare
decisis as a means of thwarting the arbitrary administration of justice as well as providing
a clear rule of law by which the citizenry can organize their affairs. Westfield Ins. Co. v.
No. 19AP-775 6
Galatis, 100 Ohio St. 3d 216, 2003-Ohio-5849, ¶ 43, citing Rocky River v. State Emp.
Relations Bd., 43 Ohio St. 3d 1, 4-5 (1989). The doctrine is of fundamental importance to
the rule of law. Id. at ¶ 44. This court is bound by the doctrine of stare decisis and must
follow our own court's precedent. Watson v. Ohio Dept. of Rehab. & Corr., 10th Dist. No.
11AP-606, 2012-Ohio-1017, ¶ 16. We will not depart from the doctrine of stare decisis
without special justification. See State ex rel. N. Broadway St. Assn. v. Columbus, 10th
Dist. No. 13AP-963, 2014-Ohio-2196, ¶ 19, citing Westfield Ins. Co. (any departure from the
doctrine of stare decisis demands special justification).
{¶ 14} In the present case, Three-C gives us no compelling reason to depart from our
precedent in the Nationwide cases. Although Three-C argues that the benefit to Liberty is
that Three-C satisfied Liberty's contractual obligations to restore the vehicles to their pre-
accident condition, any effect upon Liberty's contractual duties was merely an incidental
consequence of Three-C's agreements with its customers to repair their vehicles. Three-C
did not repair the vehicles to satisfy Liberty's contracts but to satisfy its own contracts with
the vehicle owners. Three-C's argument that it is inequitable for the customers to be forced
to pay the "short pay" amount does not equate with it being Three-C's right in this case to
litigate that issue. We note Liberty is the insurance carrier for the tortfeasor, not the
customer. The assignment of contractual rights is not before us.
{¶ 15} Any contractual dispute between the customer and the responsible insurer
over payment based upon what repairs and costs are reasonable and necessary is between
those two parties. Although the customers may not be as financially capable as Three-C to
engage in litigation with the responsible insurance company, that does not mean Three-C
should be equitably granted a forum to litigate the issue in the customers' stead.
{¶ 16} The only specific criticism of our decision in the Nationwide cases that Three-
C advances is that our reliance on Johnson v. Microsoft Corp., 106 Ohio St. 3d 278, 2005-
Ohio-4985, was misplaced. In Johnson, the plaintiff, Johnson, purchased a computer from
a retailer containing an operating system produced, developed, and licensed by the
defendant, Microsoft. As pertinent here, the court of appeals held Johnson lacked standing
to bring an unjust enrichment claim because she never conferred any direct benefit upon
Microsoft. The Supreme Court of Ohio agreed. The court first noted that an indirect
purchaser cannot assert a claim for unjust enrichment against a defendant without
No. 19AP-775 7
establishing a benefit had been conferred upon that defendant by the purchaser. The court
found the facts in Johnson demonstrated no economic transaction occurred between
Johnson and Microsoft and, therefore, Johnson could not establish that Microsoft retained
any benefit to which it was not justly entitled.
{¶ 17} Three-C contends Johnson is inapposite to the facts in this case. Here, Three-
C asserts, it is a seller whose services were purchased by Liberty on behalf of the
insureds/customers, Liberty paid directly to Three-C a portion of each of Three-C's
invoices, the short pays were created because Liberty did not pay the entire bill, and Liberty
chose for which services and how much to pay. Three-C maintains it conferred a direct
benefit on Liberty, as Three-C's repair enabled Liberty to satisfy and discharge its legal duty
to its insured. However, we disagree with Three-C. As in Johnson, the claimed benefit
conferred onto Liberty—satisfaction of its contractual duty to the insured—was too indirect.
Liberty was not a party to the transaction between Three-C and its customers, therefore,
Three-C cannot establish that Liberty retained any benefit to which it was not justly
entitled. The only ones who received a direct benefit were Three-C's customers whose
vehicles were repaired.
{¶ 18} For these reasons, even when construing the complaint in a light most
favorable to Three-C, presuming all factual allegations in the complaint are true, and
making all reasonable inferences in favor of the plaintiff, it appears, beyond doubt, that
Three-C can prove no set of facts entitling it to relief. Three-C cannot show that it conferred
a benefit upon Liberty when it repaired its customers' vehicles. Therefore, we find the trial
court did not err when it granted Liberty's motion to dismiss pursuant to Civ.R. 12(B)(6),
and we overrule Three-C's assignment of error.
{¶ 19} Accordingly, we overrule Three-C's sole assignment of error and affirm the
judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
SADLER, P.J., and KLATT, J., concur.
____________________